Worldwide, over 30% of economic activity occurs on a non-cash basis, utilizing many forms of exchange. [source: U.S. Department of Commerce] Much of this exchange occurs on an international scale between countries including governments and multi-national corporations. Some more familiar, even localized examples include:
- trade credits for business and corporate exchange – $8.25 billion per year in transaction volume (source: International Reciprocal Exchange Association, 2004/5 statistics]
- airline miles programs – becoming more liquid as they
are being redeemed for other goods and services along with
airline seats
- loyalty points/rewards – incentives for purchasing with
a specific retailer or credit card are forms of complementary
currency. Other examples are eBay’s Anytime Points that
can only be spent inside eBay, and the highly successful
Canadian Tire Money program - a paper scrip, launched in
1958, that is used both to reward purchases and encourage
continuity of business
- mutual credit systems – most notably LETS, consists of
hundreds of communities worldwide using mutual credits
to facilitate trade between participants
- time dollars – being used effectively for specific projects
to encourage volunteerism and to directly benefit at need
individuals, such as seniors and at risk youth. This is
the only method of time-based currency that has tax-exempt
status, based on the principle of “non-market” activity.
- localized scrip currencies – hours or dollar denominated and intended to support and build local economies and community cohesiveness
Healthy local economies are vital to overall prosperity and a thriving social structure. Many forces are continuing to put economic pressure on communities making innovation important to both solving challenges and creating opportunities for economic sustainability. Important considerations include:
- conventional money is scarce – most wealth is concentrated
in the top 5%
- borrower’s pay interest on every dollar – debt grows faster than the money supply
- $100 spent at the chain Borders Books creates only $13 worth
of local economic activity. That same $100 spent at a locally
owned bookstore generates $45, or over three times more local
economic activity. (source: Civic Economics)
- nationally based loyalty and reward programs do not necessarily offer direct benefit to a community
